Cryptocurrency exchange Coinbase is set to introduce its latest token, “Coinbase Wrapped bitcoin” (cbBTC) today, a novel ERC-20 token pegged 1:1 to bitcoin. This move marks a significant step in enhancing the functionality of bitcoin within decentralized finance (DeFi) by enabling users to leverage their bitcoin assets across ethereum-based decentralized applications (dApps) and Coinbase’s own Layer-2 blockchain, Base.
What Is cbBTC?
As per Coinbase, cbBTC is an ERC-20 token that adheres to ethereum blockchain’s standard token protocol. Each cbBTC token will be fully collateralized at a 1:1 ratio by actual bitcoin reserves held by Coinbase, ensuring the token’s value stability and seamless redemption for bitcoin. Users will have the flexibility to convert their BTC into cbBTC and vice versa without concerns about value differentials, as highlighted in the exchange's announcement.
Coinbase further specified that cbBTC will be supported on both the Base and ethereum blockchains. Additionally, there are plans to extend the token's compatibility to other blockchains in the near future, thereby broadening its utility scope.
bitcoin Plays Important Role in Onboarding Users
In its communication, Coinbase underscored bitcoin's pivotal role in facilitating the entrance of new users into the realm of cryptocurrencies. The exchange emphasized:
“As the oldest and most widely held crypto asset, bitcoin plays an important role in onboarding users to crypto. Coinbase has been increasing utility for bitcoin, first through the integration of the Lightning Network to drive instant, low-cost payments, and now with cbBTC. Starting today, millions of Coinbase customers can seamlessly and securely access financial apps within the ethereum ecosystem using bitcoin they already hold.”
For individuals keen on monitoring or utilizing cbBTC, Coinbase disclosed the smart contract addresses for cbBTC on both Base and ethereum:
1. **Base**: 0xcbb7c0000ab88b473b1f5afd9ef808440eed33bf
2. **ethereum**: 0xcbb7c0000ab88b473b1f5afd9ef808440eed33bf
Coinbase recently achieved a notable milestone by executing the maiden cryptocurrency transaction solely managed by artificial intelligence (AI), underscoring its ongoing pursuit of innovation and technology integration.
